Gratuity Calculator - Calculate Your Gratuity Amount

Gratuity is calculated using the formula: Gratuity = (Last Drawn Basic + DA) × 15/26 × Years of Service. The factor 15/26 represents 15 days pay for each year, with 26 working days per month. Example: Basic+DA of ₹50,000/month for 5 years = ₹50,000 × 15/26 × 5 = ₹1,44,231. Service of 6+ months in the last year is rounded up to the next full year. Use the free Gratuity Calculator on AbacusHand to calculate your exact result instantly.

Under the Payment of Gratuity Act 1972, an employee must complete at least 5 continuous years of service to be eligible for gratuity. However, the 5-year condition is waived in cases of death or permanent disability — in such cases, gratuity is paid regardless of years worked. The gratuity act covers organizations with 10 or more employees. On a basic of ₹40,000 with 5 years service, gratuity = ₹1,15,385. Use the free Gratuity Calculator on AbacusHand to calculate your exact result instantly.

On a last drawn Basic+DA of ₹50,000/month with 5 years of service: Gratuity = ₹50,000 × 15/26 × 5 = ₹1,44,231. For 10 years service: ₹2,88,462. For 15 years: ₹4,32,692. The maximum gratuity payable under the Act is ₹20 lakh (tax-free). If your employer calculates a higher amount based on their own policy, the excess above ₹20 lakh is taxable. Use the free Gratuity Calculator on AbacusHand to calculate your exact result instantly.

Gratuity up to ₹20 lakh is completely tax-free for employees covered under the Payment of Gratuity Act. For government employees, the entire gratuity (including above ₹20 lakh) is tax-free. For private sector employees covered under the Act, any gratuity exceeding ₹20 lakh is taxable at your applicable income tax slab rate. Gratuity received on death or disability is fully exempt from tax regardless of the amount. Use the free Gratuity Calculator on AbacusHand to calculate your exact result instantly.

The Payment of Gratuity Act 1972 applies to factories, mines, oilfields, plantations, ports, railways, shops, and establishments with 10 or more employees. Once applicable, it continues even if employee count drops below 10. The Act mandates payment of 15 days wages per year of service on termination, resignation, retirement, or death after 5 years. Maximum ₹20 lakh is payable. Non-payment is an offence — employees can file complaints with the Controlling Authority. Use the free Gratuity Calculator on AbacusHand to calculate your exact result instantly.